Nuchem Infrastructure Ltd.,, Delhi v. ITO, New Delhi

ITA 1215/DEL/2010 | 2006-2007
Pronouncement Date: 24-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 121520114 RSA 2010
Assessee PAN AAACN3196R
Bench Delhi
Appeal Number ITA 1215/DEL/2010
Duration Of Justice 1 year(s) 8 month(s) 6 day(s)
Appellant Nuchem Infrastructure Ltd.,, Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 24-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 24-11-2011
Date Of Final Hearing 23-11-2011
Next Hearing Date 23-11-2011
Assessment Year 2006-2007
Appeal Filed On 18-03-2010
Judgment Text
ITA NO. 1215/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 1215/DEL/2010 A.Y. : 2006-07 M/S NUCHEM INFRASTRUCTURE LTD. (FORMERLY : NUCHEM MACHINE TOOLS LTD.) BARAR HOUSE ESTATE BARA TOOTI CHOWEK SCHOOL LANE SADAR BAZAR DELHI 110 006 (PAN : AAACN3196R) VS. INCOME TAX OFFICER WARD 13(3) NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : MS. SHRADHA TALWAR CA DEPARTMENT BY : SH. R.S. NEGI SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 01.1.2 010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED READ AS UNDER:- 1. THAT ON THE FACTS AND IN LAW THE ORDERS PASSED BY THE ASSESSING OFFICER AND PARITY CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ARE BAD IN LAW AND VOID AB-INITIO. ITA NO. 1215/DEL/2010 2 2(I) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING DISALLOWANCE OF PROFESSIONAL FEE OF ` 43 000/- PAID TO SH. OS BADYAL FOR THE MONTH O F FEBRUARY 2006 U/S. 40(A)(IA). AS TDS ON THE CREDIT OF AMOUNT HAD ARISEN IN THE BOOKS OF ACCOUNTS ON 31.3.2006 AND SAME WAS DEPOSITED ON 4 TH APRIL 2006 AND CLEARED FROM BANK ON 12 TH APRIL 2006. NO DISALLOWANCE IS WARRANTED UNDER THE SECTION 40A(IA) . (II) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING DISALLOWANCE OF ` 2 21 885/- OF MERCURY TRADING ENGINEERS STATING ITS NOT A GENUINE CREDITOR ALTHOUGH ADDRESS OF THE PARTY WAS DULY PROVIDED. THE ADDITION IS ILLEGAL ARBITRARY AND UNJUSTIFIED. (III) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING DISALLOWANCE OF ` 7606/- BEING T HE DIFFERENCE IN ACCOUNT OF M/S SIGMA ENTERPRISES. THES E ARE THE DEDUCTIONS MADE FROM THE ACCOUNT OF CREDITOR WHICH THE CREDITOR HAS NOT ACCOUNTED FOR IN ITS BOO KS FOR NO FAULT OF ASSESSEE COMPANY. THE ADDITION IS ILLEGAL ARBITRARY AND UNJUSTIFIED. THE APPELLANT PRAYS FOR LEAVE TO ADD ALTER AMEND O R WITHDRAW FROM ANY OF THE GROUNDS OF APPEAL AT OR BE FORE THE TIME OF HEARING. 3. APROPOS GROUND NO. 2 : DISALLOWANCE OF PROFESS IONAL FEE OF ` 43 000/-. ITA NO. 1215/DEL/2010 3 ASSESSING OFFICER IN THIS CASE HAS DISALLOWED PRO FESSIONAL FEE PAID TO SH. OS BADYAL AMOUNTING TO ` 2 61 935/- U/S 40(A)(IA) ON THE GROUND THAT THE TDS HAS NOT BEEN DEPOSITED WIT HIN THE TIME PRESCRIBED UNDER CHAPTER XVII-B. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) PROVIDED PART RELIEF BY ALLOWING ` 2 18 335/- AS THE DATE OF DEPOSIT OF TDS IS BEFORE 31.3.2006. ADDITION OF ` 43 000/- WAS CONFIRMED AS THE DATE OF DEPOSIT OF TDS IS 7.4.2006. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL OF THE ASSESSEE CONTENDED THAT AFORESAID PAYMENT WAS MADE IN THE MON TH OF MARCH AND TDS WAS DULY DEDUCTED. THE TDS WAS DEPOSITED ON 7.4.2006. LD. COUNSEL OF THE ASSESSEE FURTHER CONTENDED THAT THE TAX WAS DEDUCTED AND DEPOSITED MUCH BEFORE THE LAST DATE O F FILING OF RETURN AS PRESCRIBED U/S 139(1). HENCE SHE CLAIMED THA T PAYMENT WAS WITHIN THE MANDATE OF THE PERIOD PRESCRIBED IN THE ACT. SHE CLAIMED THAT THE TAX DEDUCTED HAS BEEN DEPOSITED BEFORE THE END OF PREVIOUS YEAR AND BEFORE FILING OF RETURN. HENCE THERE CAN NOT BE ANY DISALLOWANCE U/S 40(A)(IA). IN THIS REGARD LD. C OUNSEL OF THE ASSESSEE PLACED RELIANCE UPON THE DECISION OF THE TRIBUNAL I N ITA NO. 4933/DEL/2010 IN THE CASE OF DCIT VS. INDRAPRASTHA P OWER GENERATION CO. LTD. VIDE ORDER DATED 18.4.2011. IN THIS CASE THE TRIBUNAL HAD AFFIRMED THAT AMENDED SECTION 40(A)(IA) OF THE ACT PROVIDES THAT IF THE TAX IS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LA ST MONTH OF THE PREVIOUS YEAR AND WAS PAID ON ORE BEFORE THE DUE D ATE SPECIFIED U/S 139(1) OF THE ACT THEN SUCH EXPENDITURE SHALL NOT BE DISALLOWED U/S ITA NO. 1215/DEL/2010 4 40(A)(IA) OF THE ACT. ADHERING TO THE DOCTRINE O F STAIRE DECISES WE SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DELETE THE ADDITION IN THIS REGARD. 7. APROPOS ISSUE RELATING TO DISALLOWANCE OF ` 2 21 885/- OF MERCURY TRADING ENTERPRISES ON THIS ISSUE ON THE CREDIT BALANCE OF MERCURY TRAD ING ENTERPRISES OF ` 2 21 885/- ASSESSING OFFICER MADE DISALLOWAN CE U/S 41(1) OF THE ACT STATING THAT THE LETTER SENT TO THE AFORESAID CREDITOR WAS RECEIVED BACK AND THE PARTY WAS NOT GENUINE CREDITOR. 8. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) IT WAS SUBMITTED THAT ASSESSING OFFICER WAS WRONG TO CONCL UDE THAT THE PARTY WAS NOT A GENUINE CREDITOR. IT WAS CLAIMED THAT TH E ASSESSEE HAS FILED THE COPIES OF BILLS / CHALLANS THROUGH WHICH THE AS SESSEE HAD RECEIVED MATERIAL FROM THE SAID PARTY AND SINCE THE ASSESSEE W AS SHORT OF FUNDS IT HAD NOT MADE ANY PAYMENT TO M/S MERCURY TRADING ENGI NEERS. IN VIEW OF THE ABOVE IT WAS PLEADED THAT NO ADDITION IS CALLED FOR U/S 41(1) OF THE ACT. HOWEVER LD. COMMISSIONER OF INCO ME TAX (APPEALS) WAS NOT SATISFIED. HE REFERRED TO THE ASSESSING OF FICERS FINDING THAT THE NOTICE SENT U/S 133(6) WAS RETURNED BACK AND THE ASSESSEE HAS NOT FURNISHED THE NEW ADDRESS OF THE PARTY. HENCE HE CONFIRMED THE ADDITION. 9. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. ITA NO. 1215/DEL/2010 5 10. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL OF THE ASSESSEE REPEATED THE CONTENTION THAT THE SAID BALANCE IS GE NUINE BALANCE AND COPIES OF BILLS AND CHALLANS THROUGH WHICH THE ASSE SSEE HAS RECEIVED MATERIAL FROM THE SAID PARTIES WERE DULY SUBMITTED BE FORE THE AUTHORITIES BELOW. SINCE THE ASSESSEE IS SHORT IN FUND IT DOES NOT MAKE ANY PAYMENT BUT THIS DOES NOT PROVE THE LIABIL ITY TO BE NON- EXISTENT. IT HAS FURTHER BEEN CLAIMED THAT THE A SSESSEE HAS NOT WRITTEN OFF THE LIABILITY IN THE BOOKS OF ACCOUNT . WE HAVE CAREFULLY CONSIDERED THE SUBMISSION. WE FIND THAT GENUINENESS OF THE PURCHASE AGAINST THE CREDITOR IS NOT DOUBTED. THE SAME IS R EPRESENTED BY PROPER BILLS AND CHALLANS. IT IS THE ASSESSEES CLA IM THAT DUE TO SHORTAGE OF FUNDS IT HAS NOT BEEN ABLE TO MAKE THE PAYMENT TO MERCURY TRADING ENGINEERS. MOREOVER ASSESSEE HAS NOT WRITTEN OFF THE SAME IN HIS BOOKS OF ACCOUNTS. UNDER THE CIRCUMSTANCES IN OU R CONSIDERED OPINION THERE IS CONSIDERABLE COGENCY IN THE ASSES SEES COUNSEL SUBMISSION THAT THERE CAN NOT BE ANY DISALLOWANCE U /S 41(1) OF THE ACT IN THIS CASE AS THERE IS NO REMISSION OF LIABILITY. ACCORDINGLY IN THE BACKGROUND OF THE AFORESAID DISCUSSION WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND DECIDE THE ISSU E IN FAVOUR OF THE ASSESSEE. ITA NO. 1215/DEL/2010 6 11. APROPOS ISSUE DISALLOWANCE OF ` 7606/- WITH R ESPECT TO M/S SIGMA ENTERPRISES. ON THIS ISSUE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT SHE SHALL NOT BE PRESSING THIS GROUND. ACCORDINGLY THIS GRO UND IS DISMISSED AS NOT PRESSED. 12. IN THE RESULT THE APPEAL FILED BY THE ASSESSE E STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/11/2011. SD/- SD/- [A.D. J [A.D. J [A.D. J [A.D. JAIN] AIN] AIN] AIN] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 24/11/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES